§1.1 Field of the Invention
The present invention concerns advertising. In particular, the present invention concerns governing the serving (also referred to as “delivery”) of advertisements based on some cost target, such as a cost budget for a given period of time.
§1.2 Related Art
Advertising using traditional media, such as television, radio, newspapers and magazines, is well known. Advertisers have used these types of media to reach a large audience with their advertisements (“ads”). To reach a more responsive audience, advertisers have used demographic studies. For example, advertisers may use broadcast events such as football games to advertise beer and action movies to a younger male audience. Similarly, advertisers may use magazines that reach a relatively affluent readership to advertise luxury items such as expensive watches and luxury automobiles. However, even with demographic studies and entirely reasonable assumptions about the typical audience of various media outlets, advertisers recognize that much of their ad budget is simply wasted. Unfortunately, it is very difficult to identify and eliminate such waste.
Recently, advertising over more interactive media has become popular. For example, as the number of people using the Internet has exploded, advertisers have come to appreciate media and services offered over the Internet as a potentially powerful way to advertise.
Advertisers have developed several strategies in an attempt to maximize the value of such advertising. In one strategy, advertisers use popular presences or means for providing interactive media or services (referred to as “Web sites” in the specification without loss of generality) as conduits to reach a large audience. Using this first approach, an advertiser may place ads on the home page of the New York Times Web site, or the USA Today Web site, for example. In another strategy, an advertiser may attempt to target its ads to more narrow niche audiences, thereby increasing the likelihood of a positive response by the audience. For example, an agency promoting tourism in the Costa Rican rainforest might place ads on the ecotourism-travel subdirectory of the Yahoo Web site.
Regardless of the strategy, Web site-based ads (also referred to as “Web ads”) are typically presented to their advertising audience in the form “banner ads”—i.e., a rectangular box that includes graphic components. When a member of the advertising audience (referred to as a “viewer” in the Specification without loss of generality) selects one of these banner ads by clicking on it, embedded hypertext links typically direct the viewer to the advertiser's Web site. This process, wherein the viewer selects an ad, is commonly referred to as a “click-through”. The ratio of the number of click-throughs to the number of impressions of the ad (i.e., the number of times an ad is displayed) is commonly referred to as the “click-through rate” of the ad.
Despite the initial promise of Web site-based advertisement, there remain several problems with existing approaches. For example, the costs for such advertisements are typically based on impressions, or based on click-throughs. Although the number of future impressions and click-throughs can, in some instances, be forecast fairly accurately, often, the number of impressions or click-throughs of an advertisement cannot be known with certainty, or with a desired degree of certainty. Since advertising costs are often tied to impressions and click-throughs, such costs cannot be known with certainty, or with a desired degree of certainty. Advertisers may be reluctant to enter into such open-ended obligations without some control over costs.
Accordingly, it is desired to permit advertisers to place budgetary constraints on costs associated with advertisement campaigns. At the same time, the entity being paid to serve such advertisements desires to maximize their revenue subject to such budgetary constraints. Advertisers may also desire that advertisements in an ad campaign be served in a fairly regular (or at least non-arbitrary) basis over a given period of time.